Seven Year Itch

With PSTN and ISDN services being switched off in 2025, the migration to hosted voice services is inevitable – for VoIP resellers it is just a question of getting the timing right

In the UK at the present time, any reseller actively selling VoIP services will stand out simply for that reason alone. While hosted VoIP for business has been around for many years, the market is yet to take off in a really dramatic way. The levels of penetration in the business sector are probably between 10 and 20 percent and they have been increasing only by a few percentage points every year.

This scenario could be seen as an opportunity or a challenge. On the one hand, 80 to 90 percent of all organisations are potential customers. On the other, if they have not moved yet, can these firms ever be expected to make the switch to VoIP?

The answer that that question has to be ‘yes’ and for two simple reasons. First, every business needs to have a central number that customers and suppliers – or whoever needs to contact them – can call. Secondly, they will at some point over the next seven years, be forced to make the switch to VoIP. In 2025, BT will turn off both the PSTN and ISDN networks, so by that time, if they want a central number (or set of numbers) they will need to move from PSTN- or ISDN-based landlines to a digital service.

This is already happening and the shift away from landlines is there anyone to see. As a recent survey conducted by ISP Review showed, two thirds of broadband users only keep their landline because that’ss what carries their broadband connection. And while there is not, as yet, been a reciprocal rise in VoIP connections – mainly due to the popularity and ubiquity of mobiles, it is only a matter of time.

The needle is definitely starting to shift. In its results for the year ended 31 December 2017, Gamma Communications plc – one of the UK’s leading providers of business VoIP services – announced a 44 percent increase in the number of cloud PBX users (from 230,000 to 331,000) and a rise in the number of installed SIP Trunks of 33 percent (from 511,000 at the end of 2016, to 680,000 at the close of 2017).

These figures will have undoubtedly continued to rise at a similar if not faster trajectory this year. And while they are not dramatic in terms of overall volume, Gamma is a market leader but one of many scores of VoIP services suppliers operating in the UK today. Gradually, the penetration of VoIP is rising, and it might have happened a lot faster had it not been for the popularity and ubiquity of mobile phones.

In the ISP Review survey, which was conducted in April this year, only 76.8 percent of respondents said that they use mobiles for making most of their voice calls, with 8.5 percent using VoIP and 14.5 percent, landlines. Most of the respondents would have been consumers, so these finding indicate that the estimate of around 10 to 20 percent penetration of business for VoIP is probably about right.

But even though many of their users will make use of company or personal mobiles a lot of the time, no businesses can afford to rely on customers and partners finding them through a mobile number. And with the switch-off of PSTN now on the horizon, and VoIP a very well proven, tried and tested value proposition – Gamma’s performance provides solid evidence of this – there is no reason for businesses not to switch to hosted voice services right away.

The logic is clear, even before all the advantages of VoIP are set out – and once they are, few businesses are going to defer their decision for long. It is then, a question of timing for resellers. Those who are selling VoIP services already have, as we said earlier, a clear differentiation and the more they can do to highlight their knowledge and experience with the technology, the more they are likely to benefit.

Resellers who are not yet offering VoIP services, may soon be compelled to seek out a supplier. All end-user customers will hear about the big switch-off that is coming in 2025. Eventually, they will have to act. The demise of PSTN may be seven years away at present, but the smarter businesses will switch now rather than wait. Similarly, the smarter resellers will get ahead of the game and start taking the VoIP message to their customers sooner rather than later. Resellers who get their timing right on VoIP will have a good opportunity to win the business of companies making the switch.

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